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EU wants airlines to have transparent prices

The European Commission proposed requiring airlines such as Ryanair Holdings Plc, Europe's biggest low-cost carrier, to include "all applicable taxes, charges and fees" in ticket ads. The proposal would also prohibit carriers from charging different prices in EU nations for the same seat. European travelers "must be able to easily compare fares between airlines," EU Transport Commissioner Jacques Barrot said in a statement yesterday in Brussels. The proposal by the commission, the 25-nation EU's regulatory arm, needs the backing of national governments and the European Parliament. The EU is seeking to bolster passenger rights as airline travel grows following deregulation in Europe. The bloc over the past three years has boosted compensation for travelers stranded because of overbooked or canceled flights and given disabled travelers the right to free assistance in airports. The EU has also required travel agents such as TUI AG to disclose the carriers booked for customers and published a "blacklist" of unsafe carriers from non-EU countries. The emergence of no-frills airlines such as Ireland's Ryanair and the U.K.'s EasyJet Plc has helped double flights in Europe over the past decade and sharpened competition for full-service carriers such as Air France-KLM Group and Deutsche Lufthansa AG, Europe's two largest airlines. At the same time, higher oil prices have forced some airlines including Air France, Lufthansa and British Airways Plc, Europe's No. 3 carrier, to raise fares through fuel surcharges. The proposal would bar airlines from promoting on Web sites and elsewhere fares that exclude extra charges, said Stefaan De Rynck, a commission transport spokesman. This prohibition would apply, for example, to a Ryanair Web site ad yesterday offering 4 million seats from 19 pence (35 U.S. cents) one way and explaining immediately underneath that the fare "excludes taxes, fees and charges," De Rynck said when shown a copy of the promotion. Under the new rules, the first price shown would have to include all the extra costs for passengers, he said. "We're talking about price transparency," De Rynck said. "The fare shown has to be the paid fare." Ryanair expressed no objections to this provision. "That's fine as long as all other airlines are forced to do the same," Peter Sherrard, a spokesman for the airline, said by telephone from Dublin. Ryanair, which has refused to impose fuel surcharges, also said it welcomed the commission proposal because it would highlight the "enormous difference" between Ryanair's fares and those of higher-cost airlines. The Association of European Airlines, representing the region's main full-service carriers, said the requirement to promote the full ticket price could be impractical. "Some elements of a price such as fuel surcharges might change at short notice," AEA spokesman David Henderson said. "This could pose particular difficulties because prices are published in various forms and some are less easy to change." Otherwise, the AEA supports the commission proposal, which aims at a "leveling of the playing field," Henderson said. In a sign the proposal may face opposition by EU lawmakers, a U.K. member of the European Parliament said the commission was addressing the problem of misleading ticket-price information the wrong way. The commission "is right to be tackling this issue, but it should put pressure on the industry to resolve it itself," Syed Kamall, a British member of the European People's Party, the EU Parliament's biggest political group, said in a statement from Brussels. "We should try to let the market sort this out before we go in all guns blazing with yet more red tape." Airlines would be banned from using misleading advertisements for cheap tickets and would have to include all "hidden extras" in the price, under rules to be outlined by Barrot. He wants a set of rules to guarantee price transparency across Europe so passengers can compare tickets easily and know that the price they see is the price they will pay. In Hungary low budget airlines advertise prices which are sometimes represent the half or even onlz one third of the real cost of travel. (Bloomberg, Financial Times)